Replies to post #120900 on Intel Corp (INTC)

[Sarmad]

it is OK that tablets and handsets are cannibalistic. What we need is for Intel to increase its share in these devices. I suppose that is happening gradually. Hopefully the pace will pick up a bit in the remainder of the year.

I had held off selling calls on my INTC shares, hoping that yesterday's report would give a boost to the stock. Didn't happen.

[chipguy]

Next week my son and I will go out and buy a laptop (he starts
university in the fall). Not a tablet, not a smart phone, but a
laptop. Toys have their place but are not substitutes for tools.
I doubt we'll be shopping for a new PC by ourselves.

[wbmw]

James Covello, Goldman Sachs: “Intel lowered its full-year forecast, and this is the fourth time in the last five quarters ... We attribute this to management struggling to accept how cannibalistic tablets and handsets are to PCs.

With statements like this, the analysts have pretty much discounted Haswell completely.

I have 3 points to make:

(1) Historically, Intel's largest PC selling cycles are Back-to-School and Holiday - neither of which have happened yet, meaning that there's no sell-through data to judge secular PC demand in any of this year's most significant cycles.

(2) In spite of market analyses suggesting a 10% or greater drop in PC demand, Intel's actual PC client volumes experienced a more modest 5% decline, since a year ago Q2'12

(3) Haswell was not a significant part of Q2 sales, and design wise, OEMs seem to be aligning to the key selling cycles, as opposed to having more designs at launch.

Taken altogether, there's an interesting take-away.

Essentially, with Haswell Intel transitioned their design optimization point for their high performance x86 processor to a lower power, higher efficiency level that combined better graphics, power and I/O integration, and system level power management to deliver a better PC experience - and the analysts want to give them zero credit in advance of even a single quarter of sales data, and in advance of any of the more interesting Haswell based designs. Further, they want to continue on the "PC is dead, and Intel isn't getting it" mantra, even though Intel's actual sales volume decline is at half of what the analyst's models predict (based on Ivy Bridge's strength alone), and that's in advance of both of the year's most important PC selling cycles.

Well, fair enough. If people want to bet with their money that Intel is toast, and do it while blind to the significant factors, then be my guest. Just makes for a better buying opportunity for me.